How do market forces affect executive compensation in Chinese state-owned enterprises?

Fang Hu, Weiqiang Tan, Qingquan Xin and Sixian Yang

China Economic Review, 2013, vol. 25, issue C, 78-87

Abstract: This paper studies how the evolution of market forces affects executive compensation in China's listed state-owned enterprises (SOEs) from 2000–2007. Along with the progress of market reforms we find that the level of executive compensation increases gradually and the relation between compensation and performance becomes more sensitive. However, the effect of market forces on executive compensation in SOEs is limited by CEOs' political connections. Our findings suggest that introducing exogenous market forces alone may not be sufficient to ensure the effectiveness of governance structure in a transition economy.

Keywords: Market-oriented reform; Executive compensation; Pay-performance sensitivity; China (search for similar items in EconPapers)
JEL-codes: G32 G38 J31 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:chieco:v:25:y:2013:i:c:p:78-87

DOI: 10.1016/j.chieco.2013.03.002

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